The Timeless Hedge: Why Gold Still Shines
Throughout history, gold has been the world’s oldest and most trusted store of value. When currencies weaken, markets wobble, or inflation surges — investors instinctively turn to gold.
In 2025, that instinct is proving right once again. The gold bull market remains intact, despite short-term corrections. The metal has reached record highs in nearly every major currency, supported by central bank buying, de-dollarisation, and renewed investor demand for real assets.
But gold isn’t just a fear trade anymore. It’s becoming part of a new structural trend — one where real assets outperform financial ones.
Inflation, Debt, and the Return of Real Assets
After years of ultra-loose monetary policy, the world is now drowning in debt. Global government debt stands near $315 trillion, while inflation remains stubbornly above target.
The result? Real yields are falling, and the purchasing power of fiat currencies continues to erode. For investors, this creates a simple equation:
- Negative real returns = declining wealth
- Precious metals = protection and participation
Gold, silver, and platinum group metals (PGMs) tend to perform best when interest rates plateau and real yields turn negative — precisely the environment we’re entering.
Silver: The Overlooked Performer
Silver is often referred to as “gold’s little brother,” but it has unique dynamics that make it a compelling addition to any diversified portfolio.
Unlike gold, silver has a dual role: part monetary asset, part industrial metal. Around 55% of annual silver demand now comes from industrial use — especially in solar panels, electric vehicles, and semiconductors.
As governments push towards renewable energy and electrification, demand for silver is expected to outpace supply through 2026. Meanwhile, the metal remains undervalued relative to gold, with the gold-to-silver ratio still near historically high levels. If silver merely reverts to its long-term mean, the upside could be substantial.
Platinum Group Metals (PGMs): Quiet Strength in the Shadows
Platinum and palladium — key members of the PGM family — have long been linked to the automotive industry, where they’re used in catalytic converters.
However, with the shift toward green technology, new use cases are emerging:
- Hydrogen economy: Platinum is vital in hydrogen fuel cells.
- Clean energy storage: PGMs support battery technology and renewable infrastructure.
- Supply crunch: Production is concentrated in South Africa and Russia, both facing structural supply risks.
As demand rises and supply remains constrained, platinum and palladium could see multi-year re-ratings, similar to the gold bull markets of the 1970s and early 2000s.
The Psychology of Gold Bull Markets
Every bull market in gold follows a pattern — disbelief, accumulation, participation, and finally, euphoria.
We’re currently transitioning from accumulation to participation, as institutional investors begin to add metals exposure back into portfolios. Central banks, particularly in Asia and the Middle East, are diversifying away from the US dollar, driving record physical gold purchases.
Gold’s strong correlation with monetary uncertainty makes it an effective hedge against both inflation and systemic risk. It’s not about predicting chaos — it’s about preparing for it.
Timing and Market Psychology
Corrections are part of every bull cycle. Sharp sell-offs, like the one seen earlier this quarter, often mark healthy resets — not the end of the trend.
Smart investors use these periods to accumulate positions, not exit them. As the bond market continues to price in rate cuts, gold’s next leg higher could begin once the US dollar decisively weakens.
Long term, we believe this metals cycle mirrors the 1970s: multi-year strength across both gold and equities, as governments wrestle with fiscal deficits and rebalancing of global trade flows.
Fat Prophets’ View
At Fat Prophets, we view precious metals not as speculation, but as strategic exposure to global monetary shifts.
Our research identifies gold, silver, and select PGM producers as key beneficiaries of the macro environment unfolding into 2026:
- Rate cuts driving weaker global currencies
- Record physical demand from central banks and investors
- Rising industrial applications in clean tech and AI manufacturing
We believe the precious metals bull market remains in its middle innings — with significant upside potential still ahead.
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